The WebM project - a VP8 video stream and a Vorbis audio stream wrapped in a Matroska container re-branded as a WebM container - launched by Google, openly supported by every major chip maker, is going to be the major codec for Google's Chrome web browser. Yes, Google is dropping H264 support from the Chrome web browser.

There are two things that are hopeful. First of all, the video tag allows multiple formats. The browser chooses one that it can display. Second of all, MPEG-1 decoding should be patent free within two years. (MPEG-1 with layer 2 audio may already be patent free for decoding and encoding.) H263 may be patent free soon if it is not already. So this problem should eventually be solved.